EEDAR: Xbox 360 is in a 'tough position' following price cut

So, the Xbox 360 Elite dropped in price (while the Arcade price rose in the UK). Cue the trumpet call of the market analysts, with EEDAR being the first to weigh in and provide insight as to what this means for the industry. Unsurprisingly, EEDAR notes that Microsoft is responding to the PS3 price drop, but also adds that the "$299 sweet spot" might not be a advantageous to the company as one might think.

"Whilst the Xbox 360 and PlayStation 3 are now equals at the $299 price point, technologically the Xbox 360 is not at the same level as its Sony competitor," explains the analysts. "This puts the Xbox 360 in a tough position where it is outmatched in terms of hardware capabilities at $299 and the Wii remains alluring to casual and price sensitive consumers at $249.

"Over the next year Microsoft will most likely reposition the Xbox 360 Elite closer to the $249 price point to both pressure Sony and attract potential Wii consumers."

EEDAR also believes that Nintendo should be preparing for another future 360 price cut: "Nintendo should drop their Wii console down to $199, not because the current Xbox 360 and PlayStation 3 price structure poses a threat; rather, because they will eventually pose a threat. Nintendo's strategy should be to capture as many consumer dollars as possible while their competitors are still weak in their offerings to the casual audience and price sensitive consumers."

Quite a few logical things being said here, especially with regards to Microsoft's position. The Xbox 360 Elite does offer less out of the box than the PS3, and now at the same price. That doesn't even account for the yearly subscription fee users have to pay in order to give the 360 the same online connectivity that the PS3 offers for free. At $299, the PS3 is the better deal. However, the stigma that the PS3 has earned as a pricey system without AAA games (unfair or fair as that may be) and the endless blundering of Sony's PR department might see the 360 remain in the lead for quite a while.